Question

NBC Universal, Condé Nast, the Hearst Corporation, Fox Searchlight, and even Charlie Rose have been or are defendants in class action lawsuits brought against them by unpaid interns who served internships at these companies or for individuals. The suits seek to have back wages paid to those who have served as interns. Traditionally, an unpaid internship was an opportunity for those who lack experience to break into a particular field and gain contacts and experiences by working in that field. The arrangement was viewed as a win-win opportunity. Young people had the opportunity to get a foot in the door for a job, make contacts for future employment, and gain experience. The companies who had the unpaid interns had the opportunity to see their work habits, abilities, and fit within the organization. The companies also held their help—and all without paying wages. However, the U.S. Department of Labor has held that an internship can be unpaid only if the intern is part of an educational training program. If the employer uses the intern in lieu of hiring additional employees or using existing staff, then they are not interns and must be paid compensation according to the terms of the FLSA. The U.S. Supreme Court has ruled on this standard in Walling v. Portland Terminal Co., 330 U.S. 148 (1947). Examples of students involved in the intern litigation include the following: • Matthew Lieb served as an intern at the New Yorker (owned by Condé Nast) in 2009 and 2010. During his time there, he proofed and edited articles, did research for articles, and maintained an online cartoon database. He worked three days per week from 10:00 a.m. until 5:30 p.m. and was paid less than $1 per hour. • Lauren Ballinger served as an intern at W magazine in 2009 and was paid $12 per day to run errands for editors and deliver items to vendors. A court has already found that Fox Searchlight Pictures violated the FLSA when it used unpaid interns in its making of the film Black Swan. The film grossed $300 million, and the class group that brought the suit had worked for very little or nothing on the film. [Glaat, et al. v. Fox Searchlight Pictures, Inc., 2 F.R.D. 516 (S.D.N.Y. 2013)] However, other cases have held that the Department of Labor test for paying interns is too rigid. [Solis v. Laurelbrook Sanitarium and School, Inc., 642 F.3d 518 (6th Cir. 2011)] But see Winfield v. Babylon Beauty School of Smithtown Inc., 89 F. Supp. 3d 556 (E.D.N.Y. 2015). Charlie Rose faced a lawsuit from 190 unpaid interns who worked for him from 2006 through 2012 and settled the case for $110,000. The interns will receive $110 for each week that they worked, for a maximum of 10 weeks. The litigation is likely to continue because a 2013 survey by the National Association of Colleges and Employers (NACE) found that one-half of college students report that their internships were unpaid. The survey was conducted in 2013 and involved 30,000 students. The survey also found that students who held paid internships were more likely to obtain a job with that employer and that their salaries were higher: 60% of students with paid internships got jobs with their employers at a $51,930 starting salary, whereas 37% of students with unpaid internships got jobs with their employers at a starting salary of $35,721.

Please review the For the Manager's Desk section and address the following elements:

Discuss the ethical issues in long-hour internships.

What about internships for no pay?

Are there benefits?

Do both sides benefit from the internship programs?

Answer 1

Long hour internships utilise interns to work for the companies with no salaries. According to the law even these interns needs to be paid minimum pay as they are contributing their part of work. Companies use these interns as they wrok for low pay and will not demand more. This is not ethical on the part of company to use these interns who come to learn the work and make them work hard without even being properly rewarded.

Internships with no pay are unfair. The interns might think that they are learning something and hence do not require any pay but atleast the companies need to respect the hardwork put by them and they also must be paid.

There are benefits with internship programs. The interns get exposed to real business world or work environment. They also get experience and will get to work for renowed companies even if it is for a limited period of time. Even the companies will have helping hands and need not pay high salaries as they do for permanent employees. Hence both the sides are benefitted by the internship program until and unless it is done in a proper manner.